Is Google Growing Its Own Online Video Competition?

That’s the intriguing notion floated by Kelly Day, who headed online video distributor Blip.TV before it was bought by Maker Studios, the even bigger creator and distributor of online content based in Culver City. Day, still an adviser to Maker, was keynote speaker as the WestDoc conference for documentary, nonfiction and reality-show makers opened this morning. Online pundits have been griping lately about the 45% cut of ad revenue that Google takes for video it distributes on YouTube, up from a 70-30 split early in the platform’s life. While Day acknowledged it’s expensive and technically complicated for Google to host and distribute the massive amounts of video it makes available on YouTube, show creators have a sense that, because YouTube has so much content, “for the most part there hasn’t been a lot of sophistication about how to monetize the best of that content.” For companies such as Maker that operate so-called Multi-Channel Networks, or MCNs, that represent dozens or even thousands of individual online creators, “there is a great opportunity to think about how to package and monetize that content better,” Day said. And Google might not even mind, she said, given its previous pronouncements and how it allowed a similar ecology of outside companies to grow and thrive atop its core search-engine business.

A given MCN generally can’t deliver anywhere near the same size audience as YouTube but can wring much higher ad rates from a show’s audience, Day said. A show on Maker can make the same money as on YouTube with one-fifth the audience, she contended. As a result, “Over the next two to three years, there’s going to be a whole platform of services and content built on top of” YouTube and other online video outlets. “It is, in an ironic kind of way, causing lots of businesses to come up with solutions”, Day said. This new array of companies and services are chasing “billions of dollars” in ad and sponsorship revenue coming into the sector from big brands in all markets, led by trendsetters such as Geico, Red Bull and Go Pro. “Brands understand the power of the connection (with audiences for online video) and want to take part in that,” she said. And that is leading Old Media companies to buy into the space, such as DreamWorks’ recent acquisition of AwesomenessTV and Discovery’s purchase of Revision3. And the Old Media money is coming from all over: Maker recently received $26 million in further investment from Canal Plus and Cinqtel, and international viewership, especially in languages other than English, is skyrocketing.